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Estate agents sell 7 homes in three months
Danny Brierley13.01.09
ESTATE agents in London dealt with a dwindling number of house sales at the end of last year as the capital bore the brunt of the housing market decline, figures show today.
Data from the Royal Institute of Chartered Surveyors show that nationally agents are selling less than one property a week.
But in London the weekly figures were even worse - on average, estate agents sold only seven properties in the three months to the end of last month.
The number of homes being sold has now dropped to the lowest level in 30 years. Agents in the South-East and South-West averaged nine sales during the same three months.
Estate agents have also said that the outlook for the property market this year remains "extremely bleak" amid rising unemployment and a lack of affordable mortgages.
At the beginning of last year Rics said estate agents were selling 23.9 properties every three months, compared with 32 at the beginning of 2004.
That figure has now dropped to 10 in three months, the lowest since Rics records began in 1978.
A spokesman for the institute said: "Buyer interest is now at levels not seen since 2006 but without mortgage finance the housing market is at a standstill and transaction levels at an all-time low."
The Bank of England has reduced interest rates from five per cent to a historic low of one and a half per cent but there is little sign of the cut filtering through to property sales, financial experts have warned.
An estimated 32,000 estate agents have lost their jobs since the start of the credit crunch and the future of London's biggest estate agency chain Foxtons has been thrown into doubt.
The Standard previously revealed that as many as 50,000 estate agents could find themselves out of work by autumn -more than double estimates made before the economic crisis worsened.
Reader views (9)
p.s. Until 2000 one could get a mortgage easily only with a 20% or more deposit and an income multiple of under 4. Anything out of the range was considered dangerous for decades. Commissioned advisers said to the mugs do not worry as the business cycle is dead so you can take on more. It is not dead! There is no credit crunch, we have merely returned to prudent lending.
- Trevor, South east
I have a deposit that would cover around 25% of the house I was looking to buy in 2007. At that time it was 20%, but Asking prices have fallen enough to change that ratio The house also only requires an income of 3.8* my income. I can get up to 4* income from most high street lenders quite easily. BUT, why would I want to buy when I can pay another few thousand pounds in rent for 18 months and then save over £200k?
An illustration: A 300k mortgage means paying back 675k (300 + 375 in interest at 5% over 25 years). If prices fell even to allow a 250k mortgage you would pay back 562.5k. By waiting 12 months, you give at least 112.5k less to the bank (675k minus 562.5k). More if waiting 18 months, as prices will fall further than that example. You save by renting now, not buying (how much rent would you pay over 12 months versus a saving of at least 112.5?).
(All that saving is without compounding interest, which would raise your total loan costs even more than I have illustrated!) The point is that only a fool would pay for a depreciating asset. The only FTBers who will not be able to buy are those that should perhaps not been allowed to? Those who take on too much debt (a danger to themselves) and those who could not save for a deposit (how will the cope with the responsibility of owning a home now that) should not be given the money.
- Trevor, South east
Well, down my high street it seems the agents are doing a great trade unless they have been creative with their sold signs again.
- Tom, Orpington
I recently made enquiries about a property I was interested and asked to be sent or told more details. Estate agent's reply: "It's all on the web. You can look it up."
- Chris, London
Isn't that called 'taking the rough with the smooth' and generally to be expected in a business? I mean, surely being the prudent business people that they are, they invested some of their massive profits in the good years to help them through the inevitable lean ones . . . ? Some of them, for example, will no doubt be glad that they bought themselves a nice shiny Mini.
- Roz, Chamonix, France
If house prices were reduced to an amount that made it feasible to buy in London, then the estate agents would do more business. If a £400k flat is reduced to £250k, then people will buy.
The fact is that the market is paralysed because sellers are too reluctant to reduce their prices and the potential buyers cannot afford to get the mortgages. Something has to give and take a loss and whilst the owners can pay their mortgages, it's not going to happen.
- Edgar Wright, Hull, England
Maybe now estate agents might be a little bit nicer and more helpful. Or is that asking too much?
- Triffidqueen, Desk in London
I have always found estate agents arrogant and openly rude. Theyr call buyers applicants as if they are doing us a favour when letting us view a property. I bought my house through an estate agent but I sold mine myself through the web.they are getting their comeuppance.
- K, london
A number of really lovely family-run businesses were closed down to make way for a fourth, then a fifth estate agency in the street where I live. They are useless parasites and when they go bust there will be empty premises sitting idle. The little shops they forced out of business will never come back, because their rents were tripled by the landlords and they were bankrupted.
- Neil, london uk,
